So, I heard a great idea from a friend when the two of us were playing Powder Toy over a LAN: "What if we could do multiplayer, where we'd have our own little areas to build stuff, but we could send things over to the other areas?"
What I imagine he means is that, given two clients (for example), anything that goes off the right edge of client A's screen ends up on the left edge of client B's screen, and vice versa. It seems like it would solve the whole frame-rate and bandwidth issue; the only things ever getting transferred to the other client are the thin strip of particles that make it to the very edge of the screen, and, at the very least, it would be fine with me if one client was lagging, but it was still able to send particles back to the other client.